Study: Cablecos, telecoms stake claim in resi market

Traditional players need to get with the program, expert says
Wednesday, August 12, 2015

DALLAS—Forty percent of new security monitoring subscribers are signing with nontraditional providers, according to Tom Kerber, Parks Associates director of research, home controls and energy.

Cablecos and telecoms have made big inroads into the residential security market, and they’re in it for the long run, according to new research about competition in the industry from Parks Associates.  

Although traditional security companies still are responsible for more than 75 percent of the monitored security market, they need to be more proactive to stay competitive, Kerber told Security Systems News.

“A lot of people, when cable and telecom entered the security space, said they’ve done that before, they come and they go, but I think this data says they are here to stay. They’re going to market with a full suite of home controls,” Kerber said.

The silver lining for traditional providers, he said, is that the cablecos and telecoms are attracting more customers. The segment of the market that is growing fastest, he said, is those companies that are offering home automation features.

Traditional security companies have the opportunity, apart from the cablecos and telecoms, to “sit across the kitchen table and show prospective customers the app. They’re in an optimum position to take advantage of this market,” he said.

Kerber took issue with a recent report from Argus Insights, which found that consumer demand for home automation has bottomed out. 

“That’s not even close, the market is converting,” he said, adding that data from ADT, Vivint and Monitronics show their results are improving because of their home automation offerings.

“Roughly one-fourth of U.S. broadband households own a functioning security system, and the smart home and IoT are creating new opportunities to grow the security market,” he said.  “New features such as the ability to self-install and to check and control their security solution through their smartphones are enticing consumers to buy these new services.”

For example, Icontrol has 1.7 million customers with ADT and Comcast.

Parks Associates “360 View Update:  Competition in Residential Security” analyzes competition for residential security services between traditional players and new players from the telecom and pay-TV sectors. The research also investigates the competitive power derived from bundling security services with video, voice and data services.

“The telecom and cable operators are taking a substantial portion of the strong growth in the market thanks in part to their ability to include security in triple- and quad-play service bundles,” Kerber said.

“Interactive service providers are experiencing dramatic growth, as the portion of new professionally monitored security subscribers that include interactive services and home controls continues to climb,” he said.